How can I, as a freelancer, avoid double taxation of my income?
April 25, 2022 | 120,00 EUR | answered by Albrecht Schneider
Dear tax advisor,
my name is Max Klinger, a self-employed freelancer who offers his services internationally. In recent months, I have noticed that my income is being taxed both abroad and in Germany, leading to double taxation. This is a financial burden for me and I am concerned about how to avoid this double taxation.
Currently, I am paying taxes in the country where I provide my services, as well as in Germany, where I reside. This results in a large portion of my income being burdened by taxes, leaving me with less money in the end.
I am aware that there are double taxation agreements between different countries that are intended to help avoid this type of taxation. However, I am unsure of how exactly I can benefit from them and if there are specific regulations that apply to freelancers like myself.
Therefore, my question to you is: How can I, as a freelancer, avoid the double taxation of my income? Are there specific measures I can take to reduce my tax burden? I would greatly appreciate your expertise and assistance in optimizing my tax situation.
Thank you in advance for your help.
Sincerely,
Max Klinger
Dear Mr. Klinger,
Thank you for your inquiry regarding the double taxation of your freelance income, which is being taxed both abroad and in Germany. This situation can indeed be financially burdensome, but there are ways to avoid or at least reduce double taxation.
First and foremost, it is important to know that double taxation agreements between different countries exist precisely to avoid double taxation. These agreements determine which country has the right to tax certain income and what measures can be taken to avoid double taxation. As a freelancer working internationally, you should check if there is a double taxation agreement between the country where you provide your services and Germany.
To benefit from a double taxation agreement, you will generally need to provide a certificate of your tax residency in one of the countries involved. This certificate is often issued by the tax office and confirms that you are tax resident in a specific country. With this certificate, you can then apply for a tax reduction in the other country to avoid double taxation.
Furthermore, there are also special regulations for freelancers working internationally. For example, as a freelancer, you may be able to claim deductible expenses such as travel costs, work tools, or training expenses. It is important to carefully document all relevant expenses and report them in your tax return to reduce your tax burden.
Overall, it is advisable to seek advice from an experienced tax advisor to optimize your tax situation and avoid double taxation of your income. A tax advisor can help you consider all relevant regulations and agreements and fully utilize your tax options.
I hope this information is helpful to you and I am available to further clarify any questions you may have on this topic.
Best regards,
Albrecht Schneider
